Empire of Deception by Dean Jobb

Empire of Deception: The Incredible Story of a Master Swindler Who Seduced a City and Captivated a Nation (Harper Avenue, 2015) by Dean Jobb is the story of perhaps the greatest swindler of the twentieth century. Although the better-known Charles Ponzi is remembered today as the greatest con artist of all time, the elaborate schemes created by Chicago’s Leo Koretz are in many respects even more remarkable. Not only did Koretz swindle an estimated $30 million (about $400 million today), much more than the $20 million (about $250 million today) taken in by Ponzi, but Koretz managed to keep his fraudulent activities in motion for almost twenty years, while Ponzi’s only lasted for just over a year. 

Born to German-Jewish parents in Rokycany, Bohemia (now Czech Republic) in 1879, Leo arrived in the United States in 1887 and settled with his parents and siblings in the city of Chicago. Koretz was a star student throughout his school days and took night classes at Chicago-Kent College of Law. He eventually graduated with a law degree in 1901. In the early years of his law career, Koretz made an honest living, but his swindling began in earnest in 1905 when he sold a series of forged mortgages on non-existent properties. He would then use the proceeds to cover the interest payments and to finance a lavish lifestyle for himself. As the need for new money to cover interest payments on old mortgages persisted, Koretz continued to sell more bogus mortgages and expanded his swindling to include the sale of imaginary stock in Arkansas rice farms. By 1911 he knew he was in far too deep to ever get enough money to make things right again, so the conniving Koretz had to continually go bigger to draw in more money to keep his machine of duplicity in motion. This culminated in the creation of the Bayano River Syndicate, which Koretz claimed controlled millions of acres of land in far-away Panama in Central America. Selling stocks in this fabricated syndicate kept Koretz’s schemes afloat for a decade, but as the sale of stocks began to slow down, it became necessary to create an even bigger sensation that would bring want-to-be investors with money in hand begging for shares. Therefore, in 1921, he cunningly leaked that oil had been discovered on the Bayano land and that investors would be promised a 60% annual return. This revelation sparked a buying frenzy, with people begging to invest – part of Leo Koretz’s charm was that he never solicited buyers, they always came to him desiring a huge payout for their investment.

A particularly enjoyable aspect of Jobb’s book is the structure. It was broken down into three distinct parts; the years Koretz ran the Bayano scheme, the short period he hid out in Nova Scotia after the scam collapsed in 1923, and his final scheme after being brought to justice in late 1924. The first section of this incredible book has been briefly summarized above, but I will say nothing on the final two, as Koretz’s machinations are so compelling they should not be spoiled. Through his thorough research into the historical record, Jobb is able to bring the scandalous fraud, and subsequent escape, of Leo Koretz to life. Not only is the wide range of characters and the settings of Chicago, New York, and Nova Scotia vividly described with all the glamour of the roaring 20s, but Jobb, just like Koretz, always has one more surprise to give to the reader, right up until the final pages.

Leo Loretz, Chicago Tribune historical photo

Told parallel to Leo Koretz’s story, is that of Robert E. Crowe, Chicago lawyer and politician famous for frequently and unabashedly imposing the death penalty. In fact, Crowe and Koretz were known to each other from their days together as law students, both graduating in the same year. Coincidently, it would by Crowe, as the Cook County’s state attorney, who would investigate Koretz after his flight from Chicago and later arrange for his arrest once his whereabouts was finally tracked down. As Jobb succinctly highlights, in the background to Koretz’s criminal activity, there was a much darker crime world of gangsters and rumrunners in existence in Chicago. Crowe and others, such as William “Big Bill” Thompson, the mayor of Chicago, waged war on vice and corruption, even if this meant taking unethical actions to maintain support. By incorporating Crowe’s story into the book, Jobb successfully highlights the career path of a contemporary of Koretz who, later in life, would play a significant role in bringing him to justice. By incorporating Robert E. Crowe’s story so fully into the work, Jobb effectively situates Koretz and his Bayano scheme into the larger events happening during the period. Jobb also demonstrates the impact of the scheme by making numerous comparisons between other great swindlers such as the infamous Charles Ponzi and the more recent investment scandal of Bernie Madoff.

A prominent theme which runs throughout the work is the role of the press when it came to the telling of Koretz’s story after the scheme had collapsed, and in the months that followed while he was in hiding and later uncovered in the Maritime city of Halifax. Koretz made sure to keep the Bayano Syndicate out of the press as much as possible to avoid unwanted suspicion, but when his fakery was revealed, the press had a field day when it came to chronicling the story and mocking the ‘suckers’ that Koretz had dupped. In their search for a good story connected to Koretz, reporters often embellished fact, or in some cases just made them up when interviews could not be obtained. Indeed, when it was discovered that Koretz had kept a ‘love-nest’ in Chicago under the name of Al Bronson, the press insinuated that there were similar romantic hide-aways, and a string of other women, across the United States. When it came to Koretz, no lead or rumour was too far-fetched to turn into a sensational story.

Given the tangled web of deception that Koretz wove over the almost two decades that he successfully swindled investors, many of whom were his own family, Jobb should be commended for his capability to untangle fact from fiction within the historical record and then tell Koretz’s complex story in a comprehensive way. As Jobb’s telling of Koretz’s duplicitous life unfolds, it seems as if the tale of deception and intrigue will never end; indeed, as Jobb relates in the final pages of this sensationally well-written work, Koretz has a plan to evade justice even in death. This book may read like a work of entertaining fiction, but it is entirely well-researched historical fact.


A Bayano River Syndicate share certificate
(Chicago Tribune historical photo)

Please add Empire of Deception: The Incredible Story of a Master Swindler Who Seduced a City and Captivated a Nation  to your Goodreads shelf.

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About the Author: 

Connor E. R. DeMerchant is an historian from Kingston, New Brunswick, Canada. He holds a Bachelor of Arts degree in English and History from the University of New Brunswick -Saint John and a Master’s in History from Queen’s University in Kingston, Ontario. In the fall of 2021 he will be pursuing a PhD in history at the University of New Brunswick – Fredericton in the field of Caribbean history. Connor enjoys researching all aspect of Victorian Britain and its global empire, with his MA thesis focusing on Queen Victoria’s interest and impact on music during her reign. When not being an academic, Connor enjoys doing genealogy, rug-hooking, and thrifting. 

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